Tossing darts at Washington

Commentary: Weak quarterly results unleash corporate tirades

SAN FRANCISCO (MarketWatch) -- In this summer of corporate discontent, a weak economy and even weaker earnings are turning quarterly reports into public forums in which normally staid chief executives rant against the government for flawed public policy.

The worse the results, the louder the rant, it seems.

A couple of examples surfaced Tuesday in reports from big-time refiner Valero Energy
VLO, -1.18%
and poultry farmer Pilgrims Pride
PPC, +2.05%
Both handed investors earnings that were well below what they accomplished a year ago, and both blamed the government.

Valero Chairman and CEO Bill Klesse: "Reckless rhetoric in Washington, D.C. complicates our forward progress. Too many in Congress fail to appreciate our industry's efficiencies, they won't acknowledge the excellent jobs we provide, they ignore the taxes we pay, and worst of all, many in Congress are more interested in scoring populist political points than reducing energy costs."

He then goes on to stump for the domestic oil industry's favorite remedy -- open up more acreage for drilling.

This is Klesse's bitter postscript to a 67% drop in Valero's second-quarter profit, clobbered by the soaring price the company has to pay for the crude oil it runs through its refineries. See full story.

Times were tougher still for Pilgrims Pride, which posted a loss of $52 million, down from a profit a year ago of $62 million. See full story.

The reason? Ethanol is siphoning much-needed feed grain away from livestock and into government-subsidized fuel distilleries. Pilgrim's Pride CEO Clint Rivers added these comments to his report to shareholders:

"There is no question that high feed costs will continue to be a significant concern for our industry. Pilgrim's Pride is part of a broad-based coalition of food companies that is strongly urging the federal government to fix its badly flawed ethanol policy before the food versus fuel debate sends the global economy into a tailspin and leads to even worse food shortages."

There's a theme running through this unprecedented level of public whining that always comes back to oil.

The clock on U.S. energy policy has been ticking ever since the 1973 Arab oil embargo. Petroleum remains a non-renewable resource, so no one can legitimately claim they never saw this coming.

The government has often skirted tough decisions on energy policy. And when they do wade into it, they get roasted for making bad decisions, which eats even deeper into their resolve.

The markets are now reacting accordingly, sending strong price signals not to everyone's liking. And the nation's corporate chieftains are now demanding that something be done.

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